We are an aging population and the legal concerns of seniors are ever mounting. At Zammitti Law, PLLC, we face these issues head on by discussing concerns relative to long term care and special needs at the very first meeting. A proactive approach with a knowledgeable elder attorney can help protect your individual well-being and the assets you have worked your life to achieve.
Brief Facts:
According to the More than U.S. Dept of Health and Human Services Survey, 70% of Americans over age 65 will need long-term care services at some point in their lives.
• Median Cost for Home Health Aide in NY is $4,400 per month ($52,800 per year)
• Average Cost for Nursing Home Care in Orange County area is $11,500 per month ($138,000/yr)
Government Assistance – Medicaid
• NY Resource Allowance (2018): $15,150 o Maximum spousal allowance: $123,600
• NY Income Allowance (2018): $842/month o Certain additional allowances for “reasonable” living expenses and spouses Anything above these limits would be spent down without further planning
Allowable Expenses & Other Transfers
• Certain purchases such as a car or home improvements are allowable for Medicaid purposes and do not count as a transfer upon applying for government assistance.
• The Medicaid LOOK BACK period for transfers when applying for facility care coverage is 5 YEARS! This means a gift today will be considered an available resource if you apply for Medicaid within five years.
How Best to “Gift” Your Assets Now
Using your home as an example, you could either gift your non-mortgaged property to your children outright or use a vehicle whereby the gift of your house is received by your beneficiaries only after your passing (ie. an irrevocable trust). The differences are as follows:
• Outright Gifts – transfer house to kids
- Starts the 5 year lookback period
- Not as safe or flexible as using an irrevocable trust
• Irrevocable Trust – transfer house to trust o Starts the 5 year lookback period
- Protects your home from any creditors of your beneficiaries
- Ensures your right to reside in your home for your lifetime
- Maintains your property tax rebates & discounts
- Includes the asset in your estate to minimize capital gains liability due from your beneficiaries at a future sale
Citizen Friendly Laws in New York
The fear of spending down your assets is real, but luckily the State of New York has several laws to assist with the avoidance of this scary prospect.
Shorter Look-Back Period for Community Care: If you are able to receive care in a residence (whether it is your home or someone else’s home), the period of time Medicaid will consider when reviewing your resources is less than the well known five years. The law is changing in this area but is currently set to be no longer than 30 months (2 1/2 years).
Spousal Refusal:
If you are married and one spouse becomes ill requiring care, it is possible to transfer the assets to the community spouse and obtain Medicaid coverage by “refusing” to provide support for medical expenses. Keep in mind, however, that the state has the option to attempt to recover from the spouse usually at a fraction of private pay rates.
